Wales Act 2014

Wales Act 2014

2014 CHAPTER 29

Commentary on Sections (and Schedules)

Part 2: Finance

Section 21: Repeal of existing borrowing power

189. This section repeals the paragraphs in Schedule 3 to the Welsh Development Agency Act 1975 that relate to borrowing and guarantees.

190. Subsection (1) repeals paragraph 3 (power for Welsh Ministers to borrow money) and paragraph 6 (power for HM Treasury to guarantee money borrowed under paragraph 3) in Schedule 3 to the Welsh Development Agency Act 1975.

191. Subsection (2) states that the repeals in subsection (1) do not affect the outstanding liability of Welsh Ministers to repay money previously borrowed under paragraph 3, nor any guarantee previously given by HM Treasury under paragraph 6.

192. Subsections (3), (4) and (5) determine that the aggregate outstanding, immediately before subsection (1) comes into force, of principal sums borrowed for capital expenditure (as defined by section 131 of GOWA 2006) under paragraph 3, on or after the day on which this Act is passed, will count towards the capital borrowing limit set out in the new section 122A(1). This therefore excludes from the £500m capital borrowing limit any legacy debt inherited by the Welsh Government prior to this Act being passed, but includes any new borrowing undertaken under these powers after this Act is passed (a limited amount of which HM Treasury has agreed the Welsh Government will be able to undertake in relation to the M4).